WASHINGTON—Noting that the CARD Act has added to the CU regulatory burden and made it more expensive for CUs to operate credit card programs, NAFCU and CUNA are urging the CFPB for regulatory relief.
The trade associations have both sent letters to the CFPB regarding the Bureau’s request for information on the credit card market. It is the agency’s second such review of the credit card market, as required CARD Act.
Both NAFCU and CUNA emphasized that while they support the intent of the CARD Act—to eliminate predatory credit card practices caused by irresponsible lenders—CUs are focused on protecting consumers’ interests.
NAFCU’s letter, signed by Regulatory Affairs Counsel Alexander Monterrubio, highlights the experiences of the trade association’s member credit unions since the implementation of the CARD Act.
“Credit unions have always been good actors in the credit card market and constantly strive to provide their members with credit card products that best fit the member’s individual financial needs and goals,” Monterrubio wrote. “However, it is undeniable that the CARD Act has required credit unions to change the way they approach the credit card market.”
The growing regulations on credit unions has had a significant impact on the credit card market continued Monterrubio. “In particular, the CARD Act required credit unions of various sizes and complexities to incur significant compliance expenses.”
Monterrubio features data in the letter that shows credit unions offer consumers credit card products designed to be more fair and competitive. He also writes about the CARD Act’s implementation of new disclosures and ability-to-repay standards.
CUNA emphasized that, overall, the increased cost of compliance associated with CARD Act regulations has made it more expensive for credit unions and other issuers to operate card programs.
“We therefore urge the CFPB to provide credit unions with meaningful regulatory relief from provisions of the CARD Act for which it has appropriate authority and for which there are no clear protections provided to the consumer by the implementing regulations,” wrote Luke Martone, senior director of advocacy and counsel. “The reality is that excessive regulatory requirements have the potential to divert credit unions’ resources and attention away from their primary mission, which is to meet their members’ financial needs.”
Martone noted that when a regulatory requirement results in credit unions offering fewer or more expensive services, “that rule has failed to protect consumers. We do not believe that is the intent of the CFPB.”